Privatization of School Food Services and Its Effect on the Financial Status of the Cafeteria Fund in Participating California Public School Districts.

Schmieder, June; And Others

The opportunity to increase private company revenues and the pressure to minimize losses within a public school district's cafeteria and general funds have propelled the emergence of private food-service-management companies (FSMCs). This paper presents findings of a study that examined privatization of school food services and its effect on the financial status of the cafeteria fund in participating California public school districts. The study also examined the trend toward privatization and the motivation of board members, superintendents, and chief business officials regarding reasons for electing and/or discontinuing private companies. Data were derived from documents filed with the State Department of Education. School districts of similar size and geographic region were compared during the same period to examine financial changes in the districts' ending fund balances. Sample 1 included 47 districts that contracted food services, and sample 2 included 47 districts that did not. A total of 70 board members, superintendents, and school-business officials were also surveyed. Findings indicate that the financial status of a school district changed when the district contracted for privatized school food services with an FSMC. Within sample 1, 38 percent of the districts experienced a net loss in ending fund balance, and 55 percent of the districts showed a net gain in ending fund balance. Within sample 2, 28 percent of the districts experienced a net loss, whereas 66 percent increased their ending fund balances. Although district decision makers generally believed that private organizations offered more services and resources, findings indicate that districts that contracted with FSMCs were not guaranteed positive cafeteria fund balances. Fees did affect the net gain or loss. Districts that had already privatized their school food services would consider privatizing other support services rather than educational services. Ten figures, a list of definition of terms, a list of districts and year of participation, and a list of participating public school districts and comparable school districts are included. (LMI)